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Best offshore bank account

Financial discussion for any financial queries for Expats
Paultry
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Best offshore bank account

#276835

Postby Paultry » January 12th, 2020, 11:34 am

Close family relative is taking a job in Saudi and will be non-resident for tax purposes.

The employer has advised that an offshore bank account be opened and salary in sterling be paid into it.

I have two questions:-

1. Is there a 'best' offshore account, meaning not expensive to maintain.

2. Is there a reason why the salary should not be paid to a UK account directly?

All advice welcomed. Paul

BBLSP1
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Re: Best offshore bank account

#276840

Postby BBLSP1 » January 12th, 2020, 11:57 am

Off-shore (of UK) bank accounts are really best for UK Residents who have foreign earnings they don't want to bring on-shore (to UK) for reasons of UK tax liability. I have no experience of using such accounts.

Provided someone is genuinely non-resident (the rules are complex) then there is no need to keep the money off-shore, at least for for income tax purposes. Someone non-resident, but say declaring property rental/ investment income etc. in the UK and who completes an annual UK tax return just has to state their country of residence on the non-residency pages, that's all, no need to even state your overseas income even if brought on-shore (to UK).

However - current accounts would be closed by most UK banks if they found out a customer was non-resident. This is for ease of the bank rather than any legal requirement - they just can't be bothered to risk the chance of any money laundering activities etc. for a perceived higher risk group (non-residents) for the small number of customers so affected. Despite this, it is best to keep a UK bank account going if you can when you work abroad, but you will need a UK address to do this and to be discreet as to your status.

dspp
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Re: Best offshore bank account

#276845

Postby dspp » January 12th, 2020, 12:38 pm

Paultry wrote:Close family relative is taking a job in Saudi and will be non-resident for tax purposes.

The employer has advised that an offshore bank account be opened and salary in sterling be paid into it.

I have two questions:-

1. Is there a 'best' offshore account, meaning not expensive to maintain.

2. Is there a reason why the salary should not be paid to a UK account directly?

All advice welcomed. Paul


I've used NatWest Guernsey in this instance. Best to have two accounts. One is for the money to arrive into. The second is for any interest etc to accrue into. HSBC offer the same service. Yes, it is best to go straight offshore for a variety of reasons I will not go into here - your relative will soon get clued up.

regards, dspp

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Re: Best offshore bank account

#276864

Postby Nimrod103 » January 12th, 2020, 3:47 pm

One further piece of advice is to keep a UK bank account open - don't close it - as it is almost impossible to open a UK account if living overseas. You never know when you might need a UK account.

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Re: Best offshore bank account

#276867

Postby stevensfo » January 12th, 2020, 4:18 pm

Nimrod103 wrote:One further piece of advice is to keep a UK bank account open - don't close it - as it is almost impossible to open a UK account if living overseas. You never know when you might need a UK account.


Agreed. I once told someone in a Halifax branch that I was going to work in France, and the way they reacted, I thought she was going to press the panic button! Twenty years and three countries later, I've learned my lesson.
The person going to work in Saudi Arabia should do all in his power to keep an address for correspondence active in the UK, whether a parent, brother or sister. They should be squeaky clean with tax issues and do nothing that could be interpreted as illegal. But, at the same time, they should not let their banks know that they've left the UK. Take 'Privacy' seriously and have as many letters, statements and magazine subscriptions etc posted to that correspondence address. If it's the first time they've worked abroad, they'll probably be so excited that these mundane details won't register, but they really need to keep a foot in each country.

Steve

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Re: Best offshore bank account

#276888

Postby Lootman » January 12th, 2020, 6:14 pm

BBLSP1 wrote:Provided someone is genuinely non-resident (the rules are complex) then there is no need to keep the money off-shore, at least for for income tax purposes. Someone non-resident, but say declaring property rental/ investment income etc. in the UK and who completes an annual UK tax return just has to state their country of residence on the non-residency pages, that's all, no need to even state your overseas income even if brought on-shore (to UK).

Yes, but if you arrange your affairs so that you have no UK-sourced income AND you are non-resident, then there would be no need to submit a UK tax return at all, and therefore no need to give HMRC any information about yourself. HMRC might not even know which country you live and work in, nor if you move from that country to another foreign country.

For those who value their privacy, that might be important.

stevensfo wrote:
Nimrod103 wrote:One further piece of advice is to keep a UK bank account open - don't close it - as it is almost impossible to open a UK account if living overseas. You never know when you might need a UK account.

Agreed. I once told someone in a Halifax branch that I was going to work in France, and the way they reacted, I thought she was going to press the panic button! Twenty years and three countries later, I've learned my lesson.

The person going to work in Saudi Arabia should do all in his power to keep an address for correspondence active in the UK, whether a parent, brother or sister. They should not let their banks know that they've left the UK. Take 'Privacy' seriously and have as many letters, statements and magazine subscriptions etc posted to that correspondence address.

Agreed. Another way to achieve that is to set up an accommodation address or "brass plate" office address in the UK. Although I am UK-resident I have had one for many years and it is used for all my business and financial mail. I do not need to notify a change of address if I move house, and would continue to use that address even if I relocated overseas.

I also like the fact that nobody I do business with knows where I live. And they do not need to - they just need a place where they can send me post.

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Re: Best offshore bank account

#277196

Postby carioca » January 13th, 2020, 11:26 pm

My case is a little different from the typical "ex-patriots". To be an ex-patriot, I would have to be a patriot first - which I never was.
However, I spent a total of twenty years working, earning money and paying tax in the UK. When I left over 20 years ago, to move to Brazil where I still live. I decided to keep my UK current account active. I also had a portfolio of UK stocks and shares, which I still maintain.

A few years before I moved, Citibank entered the retail banking sector in the UK. Their main selling point was the international character of their business. I knew already that I would eventually end up in Brazil and that Citibank had branches there. So, I switched my account to Citibank and had my salary paid into this account (one of the conditions for opening the account). When I moved, I informed Citibank of my new address and things worked without problems. Initially, I was not able to withdraw cash from my UK account in the Citibank branches in Brazil, but that facility became available after a few years, which made things even easier.

Then, sometime in the beginning of this century, Citibank decided to review their accounts and to close those that didn't produce enough profit. Mine was one of them. They gave me two month to arrange another account. But they did it by letter via snail mail, so three weeks had already passed when I found out about their decision. By that time I was already receiving my UK pension, so I needed an account to receive these sterling payments.

The next thing I learned was that it is extremely difficult to open a UK bank account when you don't live in the UK. The major high street banks don't want to know. The only banks that are willing to consider it are the off-shore branches, but there are conditions. For example, they may expect you to maintain a "business relationship" of some 30k pounds in your account. The reason for these difficulties, as I understand it, is the fight against money laundering. The banks are responsible for making sure that the account is not used for money laundering or other illegal activities. They have to "know their customer" which is not easy when the customer lives thousands of miles away.

I managed to open an account with HSBC in Jersey after first opening an account with HSBC in Brazil. In the meantime HSBC has closed down their Brazilian retail operations. So far that hasn't been a problem, but it might one day.

The advice from my experience to someone who's about to move is:
1. If at all possible, keep your existing UK bank account. But not on the sly; tell them that you're moving, give them your new address. Keeping a UK address may work, but I believe that there are negative tax implications, such as being liable to pay income tax in both countries for your worldwide income
2. If 1 is not possible, open an offshore sterling account.

Hope this helps.

carioca

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Re: Best offshore bank account

#277297

Postby Lootman » January 14th, 2020, 11:00 am

carioca wrote:1. If at all possible, keep your existing UK bank account. But not on the sly; tell them that you're moving, give them your new address. Keeping a UK address may work, but I believe that there are negative tax implications, such as being liable to pay income tax in both countries for your worldwide income

I would not have thought that the mere existence of a UK postal address can be deemed as proof of residency. If necessary a post office box or some such surely does not connote tax residency which, these days, is determined by very specific rules.

I would not tell my bank if I was moving overseas because as far as I am concerned, it is none of their damned business where I spend my time.

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Re: Best offshore bank account

#277324

Postby Paultry » January 14th, 2020, 12:16 pm

Thank you all for the various advice.

It turns out that the requirement is only temporary since initially he is on a business visa. No problem when he is on the resident's visa.

So hopefully his salary can be remitted to the UK.

I asked at Barclays, they require a minimum balance of £25,000 in an offshore account. Quite a bit.

Thanks, Paul

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Re: Best offshore bank account

#277370

Postby BBLSP1 » January 14th, 2020, 2:06 pm

Lootman wrote:
I would not have thought that the mere existence of a UK postal address can be deemed as proof of residency.


Indeed. The document outlining the UK residency rules is RDR3. Provided you are in a 'normal' expat situation, i.e. working and living overseas with a few weeks holiday spent in the UK during the year you will generally be non-resident so long as you get a whole tax year in.

If you are non-resident, there is no tax to pay on foreign earnings, even if these are sent to the UK. In this situation you do not need an off-shore account to avoid UK tax, as none is due. Of course you may want one for other reasons, but I have been an expat for 22 years now, getting either paid locally and then transferred by me into my UK account or paid directly into my UK account. Due to UK property rentals and UK investment income I have done a tax return each year, declaring myself non-resident and using a 'care of' UK address; so far, so good.

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Re: Best offshore bank account

#277589

Postby carioca » January 15th, 2020, 11:50 am

Lootman wrote:I would not have thought that the mere existence of a UK postal address can be deemed as proof of residency. If necessary a post office box or some such surely does not connote tax residency which, these days, is determined by very specific rules.

I would not tell my bank if I was moving overseas because as far as I am concerned, it is none of their damned business where I spend my time.


I'm not sure I can agree with your last statement. If you don't tell your bank you're moving, they will continue to send all correspondence to your old (current) address, including replacement cards. You would need someone to forward these to your new address. Same for 'phone contacts. If they try several times to reach you but you're never there, they might get suspicious - as they should under the "know your customer" rule.
Also, if you plan to use your debit card to make cash withdrawals abroad, it would be a good idea to let your bank know. I've heard of cases where people were stranded in some exotic place, unable to get cash because the system blocked the card after several "unusual" transactions.

And finally, if you lie to your bank or fail to update your information when your circumstances change, they can close your account without prior notice. My experience is that it's always best to stay on the straight and narrow. Your lies will catch up with you when you least expect it.

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Re: Best offshore bank account

#277600

Postby Lootman » January 15th, 2020, 12:45 pm

carioca wrote:
Lootman wrote:I would not have thought that the mere existence of a UK postal address can be deemed as proof of residency. If necessary a post office box or some such surely does not connote tax residency which, these days, is determined by very specific rules.

I would not tell my bank if I was moving overseas because as far as I am concerned, it is none of their damned business where I spend my time.

I'm not sure I can agree with your last statement. If you don't tell your bank you're moving, they will continue to send all correspondence to your old (current) address, including replacement cards. You would need someone to forward these to your new address.

An optional service that my private POB uses is the forwarding of post. This can be done at a frequency of your choosing. Or of course you can designate someone to pick up your post and review it.

carioca wrote:Same for 'phone contacts. If they try several times to reach you but you're never there, they might get suspicious - as they should under the "know your customer" rule.

I think my Bank has phoned me up maybe once in all the time I have been with them. And phones these days work everywhere. My Bank allows you to choose a "preferred contact method" and I chose email, which of course works everywhere.(*)

carioca wrote:Also, if you plan to use your debit card to make cash withdrawals abroad, it would be a good idea to let your bank know. I've heard of cases where people were stranded in some exotic place, unable to get cash because the system blocked the card after several "unusual" transactions.

What I do is carry a Caxton FX card. Funds transfer between my bank and Caxton, and then I use the Caxton card overseas. So the bank never sees my non-UK debit card transactions.

carioca wrote:And finally, if you lie to your bank or fail to update your information when your circumstances change, they can close your account without prior notice. My experience is that it's always best to stay on the straight and narrow. Your lies will catch up with you when you least expect it.

I don't lie. It's more don't ask; don't tell. But yes, the bank could close the account if they found out. On the other hand if you tell them you are overseas they may definitely close it!

(*) The header of your emails contains your IP address. If you are paranoid then use a VPN to show your email coming from the UK. Likewise when using online banking you might want to use a VPN.

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Re: Best offshore bank account

#277814

Postby TahiPanasDua » January 16th, 2020, 10:57 am

We spent 42 years as expats and having initially closed our UK bank accounts on departure, an apparent mistake, were unable to subsequently re-open one.

However, we found it convenient to open an account with HSBC Channel Islands (now HSBC Expat) as it was accepted as a UK resident account for all practical purposes. Subsequently, we were eligible to open a UK account as my wife's salary started to be paid by the UK government. By that time, however, we were so comfortable using HSBC Expat that we didn't bother. Our main account was with HSBC Hong Kong and we subsequently opened an HSBC UK account on our return.

We still keep all 3 accounts and moving cash between them is a breeze. The Hong Kong account is useful for the share account we still keep there. It's also handy for keeping cash outside the UK should any Corbyn-style government decide to impose exchange controls (no matter how unlikely at the moment).

I heartily recommend HSBC Expat in Jersey to any expat.

TP3.

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Re: Best offshore bank account

#278436

Postby stevensfo » January 18th, 2020, 10:14 pm

carioca wrote:
Lootman wrote:I would not have thought that the mere existence of a UK postal address can be deemed as proof of residency. If necessary a post office box or some such surely does not connote tax residency which, these days, is determined by very specific rules.

I would not tell my bank if I was moving overseas because as far as I am concerned, it is none of their damned business where I spend my time.


I'm not sure I can agree with your last statement. If you don't tell your bank you're moving, they will continue to send all correspondence to your old (current) address, including replacement cards. You would need someone to forward these to your new address. Same for 'phone contacts. If they try several times to reach you but you're never there, they might get suspicious - as they should under the "know your customer" rule.
Also, if you plan to use your debit card to make cash withdrawals abroad, it would be a good idea to let your bank know. I've heard of cases where people were stranded in some exotic place, unable to get cash because the system blocked the card after several "unusual" transactions.

And finally, if you lie to your bank or fail to update your information when your circumstances change, they can close your account without prior notice. My experience is that it's always best to stay on the straight and narrow. Your lies will catch up with you when you least expect it.


In over 25 years, I've never had a problem with a bank wanting to phone me and have my UK SIM in my phone. Even if they did try, I probably wouldn't answer, unless the phone number was already known. That's just standard safety, privacy policy etc. They have my email address and UK address for correspondence, so that's fine. Besides, how do I check that the person is really from the bank, hmm? As far as I'm concerned this KYC stuff is just a smokescreen to make everyone think that the banks are squeaky clean after the financial crisis. I prefer to use KYB (Know your bank) and keep a close eye on them.

Re. using cards, the Revolut and Transferwise cards are great. I control everything. If necessary I have a few credit cards that seem to work everywhere. Personally, I have never lied to my banks. I just don't let them know exactly where I am. Nobody is breaking any law. Though if I committed a major crime, I think I'd be found very easily! Just not planning any major crimes this year. The last ones were my overdue library book when I was about 11, and deliberately making hydrogen sulphide bombs in the lower sixth. Okay, it's a fair cop! :-)

Steve

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Re: Best offshore bank account

#279900

Postby air04 » January 25th, 2020, 2:49 pm

BBLSP1 wrote:However - current accounts would be closed by most UK banks if they found out a customer was non-resident. This is for ease of the bank rather than any legal requirement - they just can't be bothered to risk the chance of any money laundering activities etc. for a perceived higher risk group (non-residents) for the small number of customers so affected. Despite this, it is best to keep a UK bank account going if you can when you work abroad, but you will need a UK address to do this and to be discreet as to your status.


My experience with Halifax, Barclays and HSBC is not the same. My wife's niece, was a student here for 3 years and had a HSBC account. She changed her address to the Indian one, but left my(UK) address for correspondence. She recently closed the account(after around 2+ years), as she did not need the account. The only drawback is that she had to fill CRS forms ( https://www.crs.hsbc.com/ ) .

My uncle had Halifax account for many many years since he left UK in 1998, the address was changed to India. No problems... he closed it a few years ago as he wanted to simplify his finance. His barclays account is still there with my (UK) address for correspondence and his Indian address for bank records. He too is asked to fill some forms by Barclays once every few years for international treaty tax purposes.

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Re: Best offshore bank account

#282766

Postby Archie159 » February 6th, 2020, 4:13 pm

Paultry wrote:Thank you all for the various advice.
It turns out that the requirement is only temporary since initially he is on a business visa. No problem when he is on the resident's visa.
So hopefully his salary can be remitted to the UK.
I asked at Barclays, they require a minimum balance of £25,000 in an offshore account. Quite a bit.
Thanks, Paul


I'm just back from about 9 years in the Gulf. I used HSBC while there, and had a local, in-country account, one in Jersey, and one in the UK. In Jersey I had several sub-accounts in various currencies. The reason why some people do this is as follows:
Frequent advice is to keep the minimum amount of cash in Saudi (or wherever you are in the Gulf). If you die, typically your local accounts will be instantly frozen while a turgidly slow, sharia-based inheritance process begins. So best keep the minimum amount there... however you also definitely need reserves - you will have occasions where large amounts of cash are needed (buying a car? paying your rent (often you have to pay much of it up front)? holiday?), so always try to keep a reserve in the same currency in one of your Jersey accounts. And if you work for a local company they can be terrible about paying salaries on time, though less so now than previously. You can then transfer local currency in and out of Saudi as needed on your phone app, with no cost. Once you have more than you need in your Jersey reserve, transfer it to pounds and either park it in your Jersey GBP account till you decide what to do with it, or bring it back to your UK account and invest it from there. Do NOT normally use HSBC's exchange rates, even if you are a premier account holder with so-called "free transfers" - they are still, usually, rubbish, and you'll get a better rate with a proper currency exchange company (you'll just need to transfer the money to them from your Jersey account to make the exchange). {"Normally" - at the moment HSBC Jersey are offering rather good rates, till later this month, if you use their new FX app}
The staff in the Gulf branch of HSBC were mostly rubbish, but almost all banks in the Gulf have rubbish staff. The staff in Jersey were very helpful and responsive.


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